Abstract: We studied the biochemical composition and photosynthetic characteristics of the aerial parasite eastern dwarf mistletoe (Arceuthobium pusillum) and the effect of infection on the needles of host white spruce (Picea glauca) in a coastal forest stand in Maine, USA. Eastern dwarf mistletoe was capable of photosynthetic oxygen evolution; however, rates were low and were exceeded by respiratory oxygen consumption at all light intensities through full sunlight. Therefore, eastern dwarf mistletoe acts as a net sink for host photosynthate. Relative to those of uninfected trees, needles from infected branches of white spruce were significantly smaller in terms of length, fresh weight, maximum cross section and the diameter of the vascular cylinder. Needles of uninfected and infected trees did not differ in terms of fresh weight to dry weight ratio, nor in nitrogen, soluble sugar or starch content. Needles of infected trees possessed significantly less α‐carotene and neoxanthin, but did not otherwise differ from uninfected needles in terms of chlorophyll and carotenoid composition. Since specific physiological roles for α‐carotene and neoxanthin have not been described, the functional significance of the decreases in their content is not known. Photosynthetic capacities of needles from infected and uninfected white spruce did not differ significantly, as measured by oxygen evolution. These findings suggest that dwarf mistletoe infection does not substantially perturb host white spruce source‐sink balance at the end of the growing season and that carbon exchange dynamics between the host and parasite are unlikely to fully explain the detrimental effects of infection on white spruce.